"The low-frills model is the flavour of the day, but premium full-service still has a place in the sun," said Chew Choon Seng, chief executive of Singapore Airlines, speaking as part of a panel debating the challenges facing the industry.
According to United Airlines chief Glenn Tilton: "We have been very poor stewards of the model, but it is not broken." However, British Airways chief executive Rod Eddington said that carriers have to "put your short-haul business through major surgery" to meet the low-cost challenge. "The days are long gone when a network carrier can be all things to all people in all markets," he said.
The radical cost cuts and adoption of low-cost traits means some network carriers are moving towards this model. "The term low-cost carrier is absolutely wrong," said IATA chief Giovanni Bisignani. "Our future structure is a low-cost industry, with some airlines offering network services at a premium the consumer is willing to pay for."
Some see low-cost carriers adding service. "I see a lack of discipline in the low-fare market with the addition of frills," said Tilton. "I'm beginning to have a difficult time telling the difference."
According to easyJet boss Ray Webster, as low-fare carriers face increasing competition, "service is clearly going to be more important". However, his airline is not ready to add frills, except possibly frequent-flyer incentives if there was a cheap way of doing it.
Source: Airline Business
